Prime Group Settles Debt, Gets $15M Infusion

CHICAGO-With Prime Group Realty Trust agreeing to escrow additional money to secure Dearborn Center costs, a deal with Security Capital Preferred Growth, Inc. is done. The now flush REIT settles a $40-million preferred stock debt, gets a $15-million loan and pays first, second and third quarter dividends on another series of preferred stock.

One of seven lenders balked at the deal, prompting Prime Group to make changes in its loan to finance construction of the $355-million Dearborn Center project under construction in the Central Loop.

“As I have stated before, the closing of this transaction, in conjunction with the recently completed sale of non-core assets, satisfies Prime Group Realty Trust’s short-term liquidity needs,” says co-president and chief financial officer Louis Conforti in a statement.

Security Capital could have called in its preferred debt. Prime Group had less than $7 million cash on hand at the end of the first quarter, less than half what Dearborn Center lenders required.